Consequences of a PIA

If you enter into a personal insolvency agreement:

• You are committing an act of bankruptcy – a creditor can apply to the court to make you bankrupt if the PIA fails.
• Your details will appear on the National Personal Insolvency Index (NPII) permanently.
• Your details will appear on your credit file for up to 5 years, or longer in some cases.
• You're not able to deal with your property (e.g. house or car) without the consent of your controlling trustee.
  • You may however be able to run your business if the terms of the agreement allow.
• You’re not able to manage a corporation until the terms of the agreement have been finalised.
• You are obligated to assist your trustee by providing information and documentation if requested.

For a comparison of the consequences of personal insolvency agreements, bankruptcy and debt agreements, see: Compare the formal options table.

Bankruptcy can impact any legal matters

If you're involved in any legal action, you need to inform your trustee. If you have a pending court case, you should contact the court to confirm whether you must still attend.

Family law court matters

If you are attending court for a family law matter where either yourself or the other party are bankrupt (or considering entering bankruptcy), it is strongly recommended that you obtain independent legal advice.

For help finding a lawyer, visit the Federal Circuit and Family Court of Australia.

If you are currently bankrupt or in a personal insolvency agreement, you must notify:

• the Federal Circuit and Family Court of Australia at the start or during any family law case you are involved in.
• your trustee if you become involved in family law property settlement proceedings.

Where the family court grants an order relating to property settlement proceedings, any person who has an interest in the property can apply to have the order set aside or varied.

For example, a creditor may apply to have an order set aside or varied if the order would prevent them from recovering the debt owing to them.

Read more about Finances and property: Bankruptcy in family law.